NRL News: Telstra could terminate NRL sponsorship after Channel Nine deal

Telstra, Australia’s biggest telecommunications company, is considering walking away from its long-time sponsorship deal with the National Rugby League. Telstra, which has committed to spending AU$100 million under its current five-year deal, could end its 17-season long title sponsor agreement after being blindsided in the rugby league’s deal with Channel Nine last week.

NRL is facing another major setback over fears of Telstra terminating its long-time association as naming rights sponsor with the league. According to The Guardian, Telstra could seek to retain new media rights as part of a new agreement, but is close to tearing up the title sponsor agreement, which would see the well-known NRL Telstra Premiership renamed. The move would also force the Australian Rugby League Commission to search for a new naming rights partner.

NRL chief executive David Smith was set to fall short of his bid for a payday of AU$1.7 billion for the code’s TV rights. The report suggested that Smith put the ambitious target at risk after awarding Nine Network free-to-air TV rights and streaming rights to four games a week. The report also revealed that Telstra’s business development team first learned about Channel Nine’s AU$925 million free-to-air TV rights deal from the official press release sent on Monday last week, but the first statement that publicised the deal was sent by Nine’s corporate communications team, rather than the NRL.

Telstra will have been the code’s sponsor for 17 season from 2001 by the time the current five-year deal worth more than AU$100 million for naming and new media rights expires in 2017. However, if Smith fails to deliver the billion-dollar payday he promised and Telstra terminated its sponsorship, the league and Nine will have to find a way to sell the remaining four games each round, simulcast, and online rights for as much as AU$70 million.

Telstra, along with News Corp and Seven West Media, has decided to make the largest commitment to any football code through the AFL’s record $2.508 billion TV and digital rights deal, signalling they would not be subjected to paying huge money for the NRL rights. However, Telstra will reportedly still pursue rugby league rights despite the company’s joint venture with AFL.

Telstra group managing director of media and marketing Joe Pollard said the telecommunications giant was still interested “in a range of sports” on the NRL. Pollard also revealed that Telstra is still talking to the rugby league officials and are still in negotiations.

Newscorp, the current holder of NRL pay-television rights through its wholly owned Fox Sports, was upset about NRL after it was not told of the league’s decision to sign with Nine without also agreeing to pay-TV and other digital rights at the same time. Newscorp paid about AU$1.3 billion for AFL pay-TV rights, while also gaining digital rights, but News chairman Rupert Murdoch said the company would likely pay far more for AFL than NRL rights.

"We believe in the strength of the game and we will do everything we can to make it stronger," Mr Murdoch said, reports the Australian Finance Review.

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